Ask the community...
- DO post questions about your issues.
- DO answer questions and support each other.
- DO post tips & tricks to help folks.
- DO NOT post call problems here - there is a support tab at the top for that :)
Join the conversation
Join the conversation
Had this happen with my restaurant equipment financing. The notice of assignment came but no UCC-3 was ever filed. Caused major problems when I tried to get an SBA loan 8 months later because the lien records were inconsistent.
How did you eventually resolve it? I'm definitely going to stay on top of this now.
Had to get both the old and new lender involved to sort out the documentation. The new lender finally filed the assignment but it delayed my SBA approval by 6 weeks. Could have been avoided if I'd checked sooner.
Bottom line: the notice of assignment transfers the debt legally but doesn't update public UCC records automatically. New lender should file UCC-3 assignment within reasonable time. You should verify it gets done because it affects future financing and lien releases. Don't assume it happens automatically.
Perfect summary, thank you. I'm going to contact the new lender tomorrow to make sure they understand they need to file the UCC-3 assignment and ask for confirmation when it's done.
Smart move. Most lenders are good about it when you ask directly, they just sometimes forget in the shuffle of processing loan transfers.
Join the conversation
One more thing - check the timing of your searches. UCC filings can take time to appear in the databases after they're filed, and some states are slower than others to update their systems. You might want to do a final search right before closing to catch any last-minute filings.
Some states can take several days to update their databases. It's always good practice to do a final search within 24-48 hours of closing.
I always tell clients about the timing issue upfront so they understand why we need to do multiple searches throughout the due diligence period.
Just wanted to add that I've also used Certana's verification tool for multi-state searches and it really helps catch the inconsistencies. The automated cross-checking saved me probably 20 hours of manual comparison work on my last big deal.
That time savings alone sounds worth it. Manual cross-checking between 8 states worth of filings would take forever.
Automation is the future for this kind of work. Too easy to make mistakes when you're comparing documents manually across multiple states.
Join the conversation
One more thing to consider - if your supporting obligations include things like accounts receivable from maintenance contracts or insurance proceeds, those might need separate treatment as proceeds rather than supporting obligations. The classification can affect perfection requirements.
Insurance proceeds are typically covered under proceeds provisions rather than supporting obligations. Most standard UCC filings include proceeds language that would cover insurance payments automatically.
Yes, proceeds are usually covered separately. Your UCC should have language like 'together with all proceeds, products, and accessions thereof' which would pick up insurance money.
Thanks everyone for this discussion. I feel much more confident about handling supporting obligations in my UCC filings now. Going to revise my standard forms to be more explicit about these types of obligations.
Glad this was helpful! If you're revising your standard forms, definitely consider using a document verification tool like Certana.ai to double-check that your new language properly aligns with your security agreements. It's saved me from several potential perfection gaps.
Great suggestion. I'm definitely going to look into that verification tool before I file this UCC. Better to catch any issues upfront than deal with problems later.
Join the conversation
This thread is making me nervous about my own Colorado filings. Going to double-check everything now to make sure our UCC search reports are actually complete.
Smart move. Better to be paranoid about lien searches than miss something important.
Exactly. Missing a prior lien because of search system problems could be catastrophic for a secured lender.
For what it's worth, I ended up calling Colorado SOS UCC department at 303-894-2200 and they were able to confirm my filing over the phone while their search system was acting up. Might be worth trying if you need immediate verification.
Good idea. Sometimes the old-fashioned phone call is more reliable than their online systems.
Just make sure to get the name and confirmation number of whoever you speak with for your records.
Noah Irving
If you're really stuck, you might want to consider reaching out to the secured parties directly. Sometimes they can clarify which filings are still active and what exactly is covered.
0 coins
Vanessa Chang
•That's a good idea but not always practical if you're trying to keep your interest in the equipment confidential.
0 coins
Noah Irving
•True, but sometimes it's worth it to avoid potential litigation down the road.
0 coins
Madison King
This whole thread reminds me why I hate UCC due diligence. There's so much room for error and the consequences of missing something can be huge. At least with real estate you have title companies to handle most of this.
0 coins
Ella Knight
•The good news is that tools are getting better. I've been impressed with how much time the automated verification tools save compared to doing everything manually.
0 coins
Madison King
•Yeah, I need to look into those. Manual verification is just too error-prone when you're dealing with multiple name variations and filings.
0 coins